Otis Asia Pacific (a)

After reviewing all the details of the challenges and competitors position within the region (PAO), I believe that the main problem is a lack of coordination and information between different countries in the Asia Pacific. Please follow me for a moment on this thought:

Our Region is growing fast, mainly in Japan and India. Some countries as Hong Kong where the market is mature the business is driving by price.

Our key business will be the service, because of technology is driven by Japanese companies. We have to found our best technology, and way to do things at the less cost. It is important for Otis PAO to have a general view of the region and know as well as we can the local problems, in order to take advantage of the opportunities in each country.

As a general view the challenges for each country are:

Hong Kong:

- Maintain a reasonable return on sales, improve operating efficiency and minimize service units lost to competitors

- In order to maintain profitability or market share it is necessary to find ways to reduce cost.

- Cost-reduction efforts were focused on negotiating with factories to lower prices, rather than look at how the country organization could also lower their cost.

- Most of the local procurement patterns are habits, they have to consider changes in supply sources.

- The local staff is reluctant to cahge suppliers, there is a perceive quality issue and an emotive issue of dealing with Chinese supply source.

- Change in thinking attitude.

- Learn from the past than maintained it.

MALAYSIA

Problem: Japanese competitors are high technology and low cost for two reasons: First they are buying market share. Second, some parts come from Korean, Taiwan and China sources, and Otis is obliged to fully supply by their high-priced Japanese Plant.

In geared elevator market medium-rise buildings Otisґs challenge they can account up of 35% of the total new demand, but they do not have product to offer because the Otis Japanese division stopped the production.

Challenges: All operations are expected to grow in three areas: profit, market share and cash flow. The market share is dropping significantly, and this could have severe long-term implications.

- They have to decide exactly their priorities

- Make the service business more profitable

- Push to get better prices for new equipment.

- Identify key jobs; focus on them, sacrificing margins and the larger number of small jobs.

INDIA

Problem: Regulations included both restrictions on majority foreign-owned companies and excessive duties on imports (rises 190% of the costs).

Challenges:

- Gradually update technology products and improve the quality of its facilities and operations. Improves to export components to other Otis facilities (exploited their low-cost position).

- The 85% of new equipment sales